Where are you downloading it from? Even if it's not native, it should still run.
Maybe it’s not a translation (i.e., Rosetta 2) problem rather a Big Sur compatibility issue. I don’t know. R2 being the wall depends if Steam uses Intel specific instructions for optimization.
Computerworld said:
What can’t Rosetta 2 translate?
Rosetta cannot translate kernel extensions or Virtual Machine apps that virtualize x86_64 computer platforms. Developers should be aware that Rosetta is also unable to translate AVX, AVX2, and AVX512 vector instructions.
Because it is so tightly integrated with the chip, Rosetta 2 means some apps will run faster on an Apple Silicon Mac than they do on Intel.
www.computerworld.com
I do recall seeing a similar error when launching one of my migrated apps. I don’t recall which app it was, although, I could do without it moving forward so I trashed it.
Unhelpful, Redditors have mixed reports of whether or not Steam works on M1.
https://www.reddit.com/r/mac/comments/krj4je
So, I tried launching Steam and was shown (what I’m assuming is) the same error as the OP.
The explanation (i.e., clicking on the
? icon) is general info probably carried through a few macOS User Guides.